The FDA rejected Pain’s lead asset and said the drug’s negatives outweigh its positives.

"The data submitted in [the] NDA do not support the conclusion that the benefits of [REMOXY] extended-release capsules outweigh the risks,” the FDA said in a statement.

Why It’s Important

As an abuse-deterring, extended-release form of oxycodone, Remoxy was Pain Therapeutics’ answer to the opioid crisis.

"This is a bizarre conclusion to reach, especially during a time of staggering human and economic toll created by opioid abuse and addiction," Pain Therapeutics CEO Remi Barbier said in a statement.

"We have an innovative drug with a social purpose, and a staggering amount of data that easily supports best-in-class abuse deterrence versus OxyContin. We relied on the criteria of a fair, neutral and impartial regulatory review, as any sponsor would. Instead, I believe REMOXY received an ideological judgement [sic] call that is vague in nature but conclusive in its damaging effects."

DURECT Corporation (NASDAQ: DRRX), which licenses to Pain, fell more than 8 percent Monday morning, but ended up closing the day 2.1 percent higher.

What’s Next

Pain Therapeutics said it will redirect its resources to advance its Alzheimer’s assets.

"Alzheimer's disease is a therapeutic indication with a profound need for new treatments," Barbier said. "A reorganization of the company represents a natural and timely evolution of the strength of our program in Alzheimer's disease."

Details of the plan will be discussed on a conference call in the coming weeks, according to Pain Therapeutics.